An MP has called on the Financial Conduct Authority (FCA) to inform clients when their advice firm has lost its pension transfer permissions.
But one advice firm New Model Adviser® has spoken to, which had advised members of the British Steel Pension Scheme (BSPS), said the FCA did indeed require it to write to clients and even provided a template letter to do so.
Responding to a report by the Financial Times, Nick Smith, MP for Blaenau Gwent, told the paper: ‘If the FCA find a problem with the advice a firm is giving, then the people who’ve been advised by them need to be told straight away.’ His comment came after the FT discovered clients had not been made aware the firm that gave their advice had subsequently had its defined benefit (DB) transfer permissions halted by the FCA. Read the FT’s story here.
The FT spoke to a BSPS client of a firm called West Wales Financial Services, which in December 2017 was told to immediately cease all regulated activities relating to DB pension transfer business. Its FCA register entry now simply notes a limitation on its pension transfer activity to only advising on the transfer of benefits from polices carrying a guaranteed annuity rate.
The client, Mr Thomas, told the FT he had not had any formal notification from the firm or the FCA ‘about the problems they found with my firm’.
Speaking to New Model Adviser®, the director of a firm that advised BSPS members said it was told to write to clients using a template letter written by the regulator, which included a nudge to complain.
‘The FCA made it mandatory that we had to write out to all British Steel clients. They had two templates: those who had been advised and the transfers had gone ahead and those where it had not gone ahead but had been in the advice process.
'I wrote an update anyway. I wrote to all our clients across the firm, but we had no choice. You had to use this letter [for BSPS clients], and it encouraged them to complain. It said if you are not happy you have the right to complain, you can go to the Financial Ombudsman Service.’
However, the adviser suspected the FCA did not require firms that had had their permissions halted but had not advised BSPS members to write to those clients.
According to the FT, when it asked the FCA the regulator did not confirm whether it had required firms to undertake a customer redress programme but would ‘continue to work with the relevant BSPS firms’.
New Model Adviser® has named a number of firms that have had their DB transfer permissions limited since 2015. Excluding firms that have regained their permissions subsequently, they are:
- Active Wealth (UK) Ltd
- BlackStar Wealth Management Ltd
- Retirement & Pension Planning Services
- Bartholomew Hawkins
- Cowley & Miller Independent Financial Services
- Hansells Solicitors
- Gerard Associates
- Active Finance (Scotland)
- Premier Wealth Managers
- Radcliffe & Company (Life & Pensions)
- Nectar Wealth
- Omega Financial Solutions
- James Hair Group